TECH: Cymer announces breakthrough in chip-making

Milestone promises to make electronics vastly more powerful

RANCHO BERNARDO -- Computer chips made with new equipment from
Cymer Inc. will be hundreds of times more powerful than today's,
the semiconductor company said Monday.

The company said it has made the first delivery of its
next-generation light source to the Dutch semiconductor company
ASML. The light source uses a technology called extreme ultraviolet
lithography, or EUV. This etches circuit patterns onto
semiconductor chips such as processors or solid-state drives for
computers, and for many other electronic devices.

Cymer has the lead in developing EUV, said Andy Ng, an analyst
at Morningstar, a Chicago-based research firm. Electronics
companies have their eyes fixed on the technology's progress, he
said.

"The industry needs EUV to work," Ng said.

Cymer is an exception in the technology hardware arena, which is
dominated by foreign competitors. It is the market leader in
semiconductor light sources, supplying more than 70 percent of the
units installed, Ng said. The nearest competitor is Gigaphoton, a
joint venture between two Japanese companies.

Cymer says its new light source will help chipmakers fulfill
Moore's Law for at least another decade. Moore's Law states that
the circuitry in chips doubles in power about every two years.

The company is constantly striving to develop technology that
can etch smaller circuit patterns. This packs more circuitry onto a
chip, increasing performance and reducing power consumption. The
size of the circuit pattern depends upon the wavelength, and
smaller is better.

The current standard is called deep ultraviolet lithography, or
DUV. The next generation EUV devices use a wavelength 15 times
smaller than current systems, Cymer says. They can etch circuits
with a width of 10 nanometers, or 10 billionths of a meter.

Cymer was founded by UC San Diego alumni Bob Akins and Rick
Sandstrom, and maintains close ties with the university, sponsoring
students and collaborating on research. Last year, for example, a
UCSD team led by researcher Mark Tillack invented a way to reduce
the cost of producing EUV light sources.

However, Cymer's research is difficult, costly and takes years.
And EUV is far from ready, Ng said.

ASML will incorporate Cymer's light source into its etching
device, called a scanner. The scanner must be tested before
deliveries to semiconductor makers can begin. Deliveries are
expected in a year.

These obstacles make the transition from one technology to
another a time of vulnerability for Cymer. In December 2007, Cymer
traded above $40 per share, but early this year shares dropped
below $20 each.

However, Cymer shares have rebounded over the last few months.
Shares closed after Monday's announcement at $29.23, up $1.17 for
the day.